artikel entrepreneur thinking and acting

7/23/2019 Artikel Entrepreneur Thinking and Acting

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HOW DO ENTREPRENEURS THINK AND ACT?

SESSION 2 (out of 10)ENTREPRENEURIAL

THINKING AND

ACTING

This session is part of a 10-weeks coursegiven to master students of the SOLVAYBRUSSELS SCHOOL OF ECONOMICSAND MANAGEMENT by professor OlivierWITMEUR.



Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR 2

• How do entrepreneurs think

and act?

• Are they different from

“managers”?

• The difference between risk

and uncertainty.

QUESTIONS AGENDA RESOURCES

• Introduction to Effectuation

•

Wafels & Dinges case

• What makes entrepreneurs

entrepreneurial (Sarasvathy)

Desired Outcomes of the Session



Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR

How To Navigate In Turbulent Times?

3

VOLATILITY

Nature, dynamics and speed of change.

A

U

C

V

AMBIGUITY

Haziness of reality, potential for misreads, and the

mixed meanings of conditions.

COMPLEXITY

Multiplex of forces, confounding of issues and

causes-and-effects confusion.

UNCERTAINTY

Lack of predictability and prospects for surprises.




ELEMENTS OF ENTREPRENEURIAL LOGIC: INTRODUCTION TO EFFECTUATION

#1




Managerial Approach based on optimization Selecting between given means to achieve a predefined goal

5

How to optimize the use of the resources?

GivenGoal

Resource 1

Resource 2

Resource 3

Resource 4

Resource 5

Typical tools & techniques: project management, leadership, controlling, quantitative methods…




A more creative approach based on planningGenerating new means to achieve pre-determined goals

6

How to write a ‘case’ or a plan toask for more resources.

Resource 1

Resource 2

Resource 3

(needed)

(needed)

Typical tools & techniques: strategic and financial planning

GivenGoals


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Entrepreneurial Thinking Imagining possible new ends using a given set of means

7

How to exploit one opportunity inside theopportunity space?

Resource 1

Resource 2

Resource 3

Resource 4

Resource 5

Possible goal 1

Possible goal 2

Possible goal 3

…

…

Opportunity Space

Typical tools & techniques: co-creation, creativity, enrolment, lean entrepreneurship, bootstrapping….



Introducing Effectuation:The logic of expert entrepreneurs

8

The word effectual (entrepreneurial approach) is the inverse of causal (managerial

approach).

In general, in MBA programs across the world, students are taught causal or

predictive reasoning in every functional area of business.

Saras Sarasvathy, India



Causation vs. Effectuation

9

CAUSATION EFFECTUATION (Cre-Action)

Planned approach

Top-Down

Managerial logic

Prediction based: To the extent we can predict

the future, we can control it.

Emergent approach

Bottom-up

Entrepreneurial logic

Control based: To the extent we can control

the future, we don’t need to predict it.

Effects arepredicted

Need tomanage the

causes

Causes aregiven

Need tomanage the

effects

For predictable situations For uncertain situations



“The test of a first-rate intelligence is the abilityto hold two opposed ideas in the mind at the

same time, and still retain the ability to function.“

- F. Scott Fitzgerald




Principle #1: Bird in Hand

11

Start with who you are, what you know and whom you know

… Not with pre-set/given goals (based on prediction)

Typical entrepreneurial resources

• Expertize, skills…

• Social capital

• Psychological capital: hope, optimism, self efficacy and resilience




Principle #2: Affordable loss

12

Invest what you can afford to lose extreme case = 0 )

… Not expected (risk adjusted) return




Principle #3: Crazy Quilt

13

Build a network of self-selected stakeholders

… Not competitive analysis and transactional relationships with first-best partners.

Co-Creation Customers

Suppliers

Channels

Financial partners

EmployeesSponsors

…

Committedstakeholders network

Crazy quilt, not puzzle.




Principle #4: Lemonade principle

14

Embrace and leverage surprises they can present new opportunities)

…Not avoid them




Nils Bergvist

15

Question• What would you do?




About Nils

16

Swedish

Environmental engineer

Worked 8 years in the mining industry in Kiruna (in Northern

Sweden)

Passion for wildlife and sports




Ice Hotel

17




Principle #5: Pilot-in-the-plane

18

The future comes from what people do

… No inevitable trends

! Control vs Plan




The Dynamics of the Entrepreneurial Network

19

Who I am? WhatI can do? Whom

I know?

My affordableloss?

Who may beinvolved?

Additionalresources

Iterative opportunityco-construction

New GoalsThe venture grows

step by step.

Dead end

My Goals?

Multiple techniques help to deal with these cycles: Design Thinking, Lean Startup,Business Model Generation, Staged Financing…

To be continued.




Managerial vs. Entrepreneurial Thinking(stylized facts)

20

Effectual

Causal

LowLow High

High Expert

Entrepreneurs

Experienced VCs

Angels

CorporateManagers

Novice VCs

Bankers

Noviceentrepreneurs




From Causation to Effectuation…and vice-versa

21

TIME AND EXPERIENCE

LOGIC

Causal

Effectual

Noviceentrepreneur

Expert

entrepreneur

Start-up

firm

Largefirm

Shift in logicnecessitated byfirm growth

Entrepreneurs

do not alwaysmanage tobridge this gap

Moderating

effect ofresources




Wafels Dinges

22

Question• What would you do next?

• What is your logic?




Don’t wait/look for the

perfect opportunity.

Just start!




NEVER STOP

WONDERING &

ASKING!




A real passion for entrepreneurship education and entrepreneurs.

• Student entrepreneurs: 2x

• Full time entrepreneur: once, in a team of 5

• Coach: 500+ projects over the last 20 years

•

(Advisory) Board member in multiple new ventures• Policy making: 2x

• Director of Solvay Entrepreneurs

• PhD in entrepreneurship in 2008

•

… never as an investor

My wife (as Colombo), no kids, one dog (Vicky).

25

Olivier Witmeur (Belgian, 46)




Solvay entrepreneurs is the entrepreneurship center of the Université Libre de

Bruxelles. We support entrepreneurs through the development of their venture, from

an idea to a successful and sustainable business.

26

Solvay Entrepreneurs



Entrepreneurship Course Session 2 2014 © Olivier WITMEUR

Let’s keep in touch!

27

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Solvay-Entrepreneurs

inFacebook.com/

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f Twitter.com/

SolvayStart

t

SolvayEntrepreneurs.be

www YouTube.com/user/

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